The best Travel Insurance to have with your HSA (Health Savings Account) or any high-deductible health plan is one with Secondary medical instead of Primary (Primary is also known as First Payer).
HSA (and high-deductible health) plans have a large annual deductibles which means that before the 100% coverage kicks in, the large annual deductible needs to be paid by someone:
- You yourself, or
- An other party
“You yourself” is self-explanatory. But, who is the ideal “other party”?
Travel Insurance with Secondary medical, not Primary, is the ideal “other party”.
This is because Secondary medical pays anything your other insurance won’t pay. Even if you have no other medical insurance that will cover you while you are on your trip, Secondary still covers you.
If you already have a Travel Insurance plan that contains primary medical, you can easily cause the Primary medical to be treated as Secondary medical. You do this by stating on the claim form that you are covered by other insurance. If you want to be sure there is no mixup, write a cover letter stating “I am covered by other medical insurance and I want my claim to be processed as a secondary claim”.
Here’s how the paperwork would be processed:
- You submit your medical bills to your HSA medical insurance first
- They send you an Explanation of Benefits form
- You send the Explanation of Benefits form in along with all the other documentation of your claim to the travel insurance company
- Whatever amount the Explanation of Benefits form states as “Your Share” gets paid, up to your policy limit, by the travel insurance.
- You use that amount to pay your share of your medical claim
How Exactly Does The Secondary Medical Benefit You?
Let’s say you have an HSA plan with a $10,000 deductible. In March you take a trip and on the trip you get it ill for a total of $6,500 in medical expenses.
When your claim is settled you pay the $6,500 received from the travel insurance toward your bills. This means you now have only $3,500 left to meet your $10,000 deductible. The cost of any illnesses or injuries that are completely unrelated to what happened on your trip go toward yor remaining deductible.
Did you notice that you don’t have your full deductible remaining, but just the balance of your annual deductible?
This is the beauty of having Travel Insurance with Secondary medical when you haven’t already satisfied your annual deductible – another party pays part or all your deductible.